CYMER BEATS FORECASTS, WILL BOOST INVESTMENT

San Diego’s Cymer posted better-than-expected earnings for its fiscal first quarter but told investors that coming quarters probably won’t be as profitable as the company invests heavily in research and development.

Cymer, which builds complex lasers used to make semiconductors, reported sales of $150.5 million for the first quarter. Earnings came in at $21.5 million, or 68 cents a share. Wall Street analysts had forecast sales of $138.7 million and earnings of 25 cents a share.

The company is developing the next generation of laser systems that will allow semiconductor manufacturers to produce even smaller, more powerful chips. Cymer recently showed off its technology, called Extreme Ultra Violet, in demonstrations. Those tests gave executives the confidence to accelerate spending, said Chief Executive Bob Akins.

“The demand for this technology and the opportunity for the company is very significant,” said Akins. “This allows chip makers to stay on Moore’s Law,” a technology-industry axiom that says the number of transistors that can be placed inexpensively on each silicon chip doubles every two years.

Cymer expects to spend $58 million in research and development in the second quarter — up from $42 million for the first quarter and $28 million for the same quarter last year. The higher level of research spending is expected to continue at least through this year. “This investment level takes us to 38 percent of revenue, which is about the highest we’ve ever run,” said Akins. “It’s because of the extreme complexity and cost of this EUV technology.”

Cymer has two competitors pursuing rival systems, but neither is as well funded as Cymer, which today is the market leader in laser systems used in chip plants. The San Diego company also had about $348 million in cash at the end of the quarter.

The company expects to deliver its first EUV system to its main customer for testing by the end of the year.